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Dairy Sector Needs Ways to Manage Volatility

UK - The UK dairy sector needs to find ways of managing volatility, farmers heard at the National Farmers Union conference in Birmingham this week.

This was sounded out by farming minister George Eustice, who remained optimistic despite the drop in prices from around 35p a litre last year to little over 20p a litre now.

“Prices will come back later this year,” he said. “Prices have already started to turn in the Netherlands.”

He said that global demand is growing at two per cent and he was confident that the British dairy sector would be able to compete in a global market.

He said the industry needs to find ways of managing this volatility and he suggested that the formation of a futures market for milk prices would help.

He said that when the US ended the quota system, it started a futures market for dairy farmers to be able ti hedge the prices and ensure a smoother market.

Junior agriculture minister Dan Rogerson told the conference during the all-party political debate that better labelling showing country of origin and transparency of costs would help dairy farmers during difficult time.

He said the there was evidence that consumers would pay a fair prices if they know the circumstances behind the prices.

Plaid Cymru leader in Westminster Elfyn Llywd said that there was a great potential for cooperatives to help farmers market their products and he called for assistance from government to help groups of farmers establish cooperatives.

Labour’s shadow agriculture spokesman Huw Irranca-Davies said that there is a need for greater diversity in the industry and while there has been consolidation, if the market was more diverse it would offer more opportunities for dairy farmers.